Massive construction boom comes at a cost

Melbourne has never had a transport construction boom such as this. Toll roads, underground rail lines, level crossing removals, railway stations, all built at a pace that would have been unimaginable a few years ago.

But it isn’t coming cheap.

Work on the West Gate Tunnel in Footscray last week.CREDIT:LUIS ENRIQUE ASCUI

Soon, the most expensive transport project in the state’s history, the North East Link toll road, will begin construction at a cost of $15.8 billion – enough to build 790 new primary schools.

And yet Premier Daniel Andrews says it will be dwarfed by the Suburban Rail Loop, a 90-kilometre rail line around Melbourne. Price tag? $50 billion.

Part of the jump in prices can be put down to so much being done all at once after years of inaction: infrastructure spending has tripled since Labor came to power in 2014. By the end of the financial year, they will have spent $47 billion on major works.

Spending peaks next year – just as the real estate downturn eats a $5.2 billion hole out of stamp duty revenue and other government income.